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ICICI Securities Report
Shyam Metalics and Energy Ltd.'s operating performance in November 2023 remained steady. Key points:
Stainless revenue added post consolidation of Mittal Corp;
metalics volume rose YoY as newly-commissioned capacities ramp up;
rolled products volume was stable month-on-month, but down YoY owing to delayed festive season; and
implied revenue reported 9.3% YoY growth aided by stainless steel.
Going ahead, we expect Shyam Metalics' performance to be aided by higher volume owing to demand uptick in infrastructure segment.
Besides, aluminium foils and stainless steel (10% of overall revenue in November 2023) are likely to diversify its earnings profile.
We maintain 'Buy' on Shyam Metalics with an unchanged target price of Rs 690 on six times FY25E Ebitda.
Key risks:
Sharp fall in pellet and rebar prices.
Delay in commissioning of capacities.
Squeeze in spreads owing to high thermal coal prices.
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